Anecdotal evidence is pointing to a small yet healthy uptick in used truck sales, as fleets seek to replace aging equipment at as low a cost to their bottom line as possible. Yet that increase in used truck sales may not have legs without a corresponding rise in new truck sales, industry experts contend.
“I would say that what I am hearing from my peers is that there is definitely more sales activity out there in the used truck market – we’re definitely seeing a glimmer of light out there,” said Marty Crawford, president of the Used Truck Association (UTA) and sales representative with the Atlanta, GA, branch of Arrow Truck Sales. “With new truck sales down, used truck sales are really what’s going to lead us out of the darkness as the economy recovers.”
Yet Crawford told FleetOwner that the challenge will be sustaining used truck sales if new truck sales remain sluggish. Research firm FTR Associates stated that it expects Class 8 production to finish the year 47% below 2008 levels, with 2010 production anticipated to be approximately 30% below 2008 levels.
“What’s in demand right now are late model, low mileage, aerodynamic-style trucks,” said Kyle Treadway, president of the West Valley, UT-based Kenworth Sales Co. dealership and chairman of the American Truck Dealers association. “But we’re setting ourselves up for a shortage of those very units in the next sales cycle if we don’t have enough new trucks being sold.”
That being said, Treadway told FleetOwner that used truck sales are indeed “a bright spot” right now for most dealers, with plenty of deals being made if they have the right models in inventory. “Fuel economy is the rule of the day, so the classic ‘long and tall’ owner-operator truck is not moving,” he noted. “Used truck values also have seemed to stabilize over the last two or three months, so if you’re not burdened with older inventory, there’s business to be had.”
Going forward, UTA’s Crawford is looking for several things to occur to keep the used truck market humming. “The first is that we have to start seeing some new truck sales. The late model, low mileage trucks everyone wants in the used market start as new trucks – and they’ve been off for a while, so that will squeeze the pipeline of them into the used market,” he explained. “Second, we need to see recovery in markets outside the U.S. When those markets pick up, we can export the overage of 2005 and 2006 models we have right now. That will help sustain the used truck business going forward.”